Dow Inc. posted lower financial results in the first quarter as a result of what officials described as "slower global macroeconomic activity."
First-quarter sales at Midland, Mich.-based Dow were down 22 percent vs. the year-ago quarter to just under $11.9 billion. The firm posted a loss of $73 million for the quarter after showing a profit of almost $1.6 billion in the same quarter in 2022.
Sales at Dow's Packaging & Specialty Plastics unit —including a major polyethylene resin business — were down 20 percent to just over $6.1 billion, with operating profit down 48 percent to $642 million.
In spite of those lower numbers, Dow Chief Financial Officer Howard Ungerleider said the unit was "one of the bright spots" for the firm, as it had better results in North America than worldwide. The unit also had volume gains in PE and olefins vs. the previous quarter.
"I'm very proud of what [P&SP] accomplished in the quarter," Ungerleider said in an April 25 phone interview with Plastics News. "We saw higher prices and good demand in North America. The U.S. consumer is still consuming and we've got a good oil-to-gas [price] spread."
Ungerleider added that supply chain bottlenecks and logistics challenges that had affected markets through 2022 "have dissipated. … We've been able to increase our shipments every month. … That bodes well for the rest of the year, especially in packaging and consumer applications."
The P&SP unit also saw sales gains in functional polymers, such as elastomers and plastomers, into renewable energy applications. Ungerleider said those gains partly came from solar films. He added that sales of PE into wire and cable compounds showed "good strength" for the quarter.
Dow's Industrial Intermediates & Infrastructure unit — including polyurethanes — saw sales fall 25 percent to less than $3.4 billion for the quarter, as operating profit plunged 81 percent to $123 million. Officials said the drop off was driven by lower demand for building and construction, consumer durables and industrial applications.
"In the pandemic, we all bought new furniture and appliances and other durable goods," Ungerleider said. "But now that those lockdowns are mostly over, people are spending on experiences." He added that higher interest rates also have played a role in reducing new construction activity.
In late January, Dow announced that it would be cutting 2,000 jobs worldwide as part of a cost-savings plan. Ungerleider said the firm has started to implement that plan, and that 75 percent of those job cuts should be completed by the end of June.
Looking ahead, Ungerleider said that higher oil-gas spreads in 2023 will benefit Dow and that the firm "is focused on what we can do to help our customers find solutions."
On Wall Street, Dow's per-share stock price was down almost 4 percent to $53.30 in early trading April 25. That price level was up 4.5 percent from the start of the year.
Dow is one of the world's largest producers of polyethylene and specialty resins. The firm employs 37,800 worldwide.